"Where are all the 'epidemiologists' who, like me, are worried less about the 'vectors' than about what will become of the real patient-the deficit-a generation or two after the 'sneeze party' is over?"

The H1N1 Virus Causes Swine Flu but What About the H1M1 Virus?

Los Angeles, November 11, 2009

Everybody's talking about the H1N1 virus because the swine flu epidemic is upon us. But why is nobody talking about the H1M1 virus, which is spreading rapidly and apt to have an even more devastating effect on the economy-especially since it gets passed on to future generations, who will suffer from it even more.

H1M1 was originally limited to people buying their first home (H1) and applying for their first mortgage (M1). These "vectors" feel an immediate sense of relief-not unlike that of a big sneeze-but the real patient is the national debt, which is further inflamed by $8,000 after each "sneeze."

Even worse, the virus has already mutated. On November 6, President Obama signed into law a bill (HR3548) extending the deadline on the original $8,000 home tax credit for new homebuyers from November 30, 2009 to April 30, 2010. This mutated virus is now spreading to a new population-previous homeowners-though the symptoms are a bit milder because the national debt will only take a $6,500 hit for every existing homeowner who qualifies for the new tax credit. Unfortunately, the moderated symptoms will be offset by the greater contagion.

Everybody loves a good sneeze now and then. But surely, I can't be the only one worrying about what all those mucous droplets are going to do to everybody else in the room. And if-like me-you're part of the US economy, then you and I are sharing the same close quarters with all those sneezers.

Interestingly, criticism of the tax credit program is coming from both the right and the left. Both sides agree that the homeowner tax credit is an inefficient way to stimulate the economy. They just disagree on what would be a better way to spend the money ($10 billion so far, plus an additional $10 billion for the extension). The right frets that 87% of the money is going to homebuyers who would have bought the same house even without the tax credit, while the left feels that the same money would produce a greater economic stimulus if it were channeled to needier people. Both sides, of course, cite statistics to prove where the money would be better spent. Both sides seem to acknowledge-at least tacitly-that the growing federal deficit is sitting in the back of the room, like an 800-pound gorilla.

Whoa, guys! What about that 800-pound gorilla? What about the Law of Unintended Consequences? It wouldn't be the first time that the "cure" was worse than the disease.

Where are all the "epidemiologists" who, like me, are worried less about the "vectors" than about what will become of the real patient-the deficit-a generation or two after the "sneeze party" is over?